Correlation Between Indorama Synthetics and Trimitra Prawara
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and Trimitra Prawara at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Indorama Synthetics and Trimitra Prawara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Synthetics Tbk and Trimitra Prawara Goldland, you can compare the effects of market volatilities on Indorama Synthetics and Trimitra Prawara and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Indorama Synthetics with a short position of Trimitra Prawara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and Trimitra Prawara.
Diversification Opportunities for Indorama Synthetics and Trimitra Prawara
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indorama and Trimitra is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and Trimitra Prawara Goldland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Prawara Goldland and Indorama Synthetics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Indorama Synthetics Tbk are associated (or correlated) with Trimitra Prawara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Prawara Goldland has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and Trimitra Prawara go up and down completely randomly.
Pair Corralation between Indorama Synthetics and Trimitra Prawara
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to generate 0.59 times more return on investment than Trimitra Prawara. However, Indorama Synthetics Tbk is 1.68 times less risky than Trimitra Prawara. It trades about -0.15 of its potential returns per unit of risk. Trimitra Prawara Goldland is currently generating about -0.09 per unit of risk. If you would invest 350,000 in Indorama Synthetics Tbk on September 12, 2024 and sell it today you would lose (72,000) from holding Indorama Synthetics Tbk or give up 20.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. Trimitra Prawara Goldland
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| Trimitra Prawara Goldland |
Indorama Synthetics and Trimitra Prawara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and Trimitra Prawara
The main advantage of trading using opposite Indorama Synthetics and Trimitra Prawara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, Trimitra Prawara can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Trimitra Prawara will offset losses from the drop in Trimitra Prawara's long position.| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
| Trimitra Prawara vs. Royalindo Investa Wijaya | Trimitra Prawara vs. Mitrabara Adiperdana PT | Trimitra Prawara vs. PT Multi Garam | Trimitra Prawara vs. Bank Ina Perdana |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |